The present invention is in the field of methods for making payments through payment cards.
Three forms of money in widespread use today throughout the world are cash, checks and payment cards (debit or credit). Each has distinct advantages, and distinct disadvantages. Cash is readily accepted, easy to use and anonymous, but it does not earn interest, it can be lost or stolen, and it is not always readily accessible. Checks are not always accepted, but they offer many advantages, since they do not have to be written until the time of payment. However, they must be physically presented and they are not anonymous. Payment cards are readily, but not always, accepted, and they offer many advantages over checks. If the card is a credit card, payment can be deferred, but the transaction is not anonymous. If the card is a debit card, payment has usually been made prior to its use, but it is anonymous. Accordingly, it is apparent that different types of money have different advantages to different persons in different situations. This may be one reason why all these forms of money are still in widespread use, and are even used by the same persons at different times.
As society and international commerce have become more dependent upon electronic transactions, money has also become more electronic. Many attempts have been made to come up with suitable forms of electronic money that mimic the physical world, or even create new forms of electronic money. However, despite the enormous need for such money, and efforts by some of the best minds and most successful companies in the world, electronic money has suffered many setbacks and been far slower to materialize than many had hoped or predicted. The reasons are many and varied, but some of the obvious reasons are security, ease of use/operation, and unwillingness of the public and/or commerce to make radical changes or embrace new technology and/or procedures. As a result, many efforts, including several potentially promising efforts, have met with failure.
Even though new forms of electronic money have been slow to develop or gain widespread acceptance, electronic payments have still moved forward. Many banks now offer some form of electronic checking. And payment cards have been used for electronic transactions in e-commerce and m-commerce (mobile commerce). Still, there is widespread concern about the safety of such transactions, and recent news stories have uncovered widespread fraudulent activity associated with use of traditional credit card numbers in e-commerce over the Internet. In addition, there is growing concern about consumer privacy, or lack thereof, due to widespread electronic profiling of consumers who make electronic payments.
Although the media has been quick to cover fraud associated with use of credit cards over the Internet, it is often overlooked, at least by the public and the media (but not the credit card companies), that the majority of fraudulent activity concerning credit cards is not associated with e-commerce activity. Most fraud occurs in the xe2x80x9cbrick and mortarxe2x80x9d world, and the numbers are daunting. Despite many attempts to combat unauthorized or fraudulent use of credit cards, it is estimated that credit card fraud now exceeds hundreds of millions, if not several billion, dollars per year. And this does not even count the cost of inconvenience to consumers, merchants and credit card issuer/providers, or the emotional distress caused to victims of such fraud, or the cost to society in terms of law enforcement and preventative activities.
Accordingly, there is a very real, long-felt need to reduce the amount of fraudulent activity that is associated with credit cards, and this need has only grown more acute as consumers and commerce search for better ways to purchase and sell goods and services via e-commerce and m-commerce. However, any solution needs to be something that is acceptable to the public at large. It should be easy to use. It should not be complicated or expensive to implement. Preferably, it should fit within the existing infrastructure, and not be something that requires a great deal of educational effort, or a radical change in behavior or habits of consumers. In other words, it should be user friendly, readily understandable and something that does not require a completely new infrastructure, which is a reason suggested by some as to why smart cards have not been widely accepted in the United States.
In addition, it is highly desirable that any solution to such problems be capable of widespread use, in many different platforms, for many different applications.
In U.S. Pat. No. 5,956,699 issued in Sep. of 1999, Wong and Anderson were the first to introduce the methodology of a system for secure and anonymous credit card transactions on the Internet. This patent introduced a system which used an algorithm to use one""s own selected Personal Identification Number or PIN as one""s own de facto digital signature. The algorithm instructs the cardholder how to insert one""s PIN into one""s valid credit card number before using it for any transactions on the Internet. The resultant scrambled up credit card number, which is tailored by the algorithm to having the same number of digits as before, is rendered useless on the Internet because the PIN insertion algorithm is changed automatically after every transaction. This methodology is not only capable of drastically reducing credit card fraud on the Internet, it is also capable of safeguarding one""s anonymity, and thus privacy, in credit card purchases on the Internet.
Since the issuance of U.S. Pat. No. 5,956,699, Wong and Anderson have also invented an anonymous electronic card for generating personal Coupons useful in commercial and security transactions, as well as a method for implementing anonymous credit card transactions using a fictitious account name. The present invention is an extension of these prior inventions that seeks to provide new methods for allowing a user to customize the use of one-time unique numbers that can be used in credit card transactions in the brick and mortar world, e-commerce, m-commerce and in many other applications. Because the methodology is well suited for use in hardware and software applications, it has widespread applicability to many different types of transactions. In addition, the present invention allows a user to categorize individual transactions. This new advantage can be used to simplify accounting procedures and consolidate multiple accounts in a single payment credit card. It also opens up many previously unknown possibilities, such as allowing a user to sell data, or protect data, relating to a given transaction.
The present invention is generally directed to a method for allowing a user to customize use of customer one-time unique purchase order numbers (xe2x80x9cCouponsxe2x80x9d). The user customizes the method by choosing a selected user key from at least two user keys, either of which can be used to generate a valid Coupon, although the Coupon will be different depending upon which user key is chosen. An algorithm is executed that uses the selected user key and a customer sequence number to generate the Coupon. The sequence number is changed after each Coupon is generated and a new Coupon can then be generated using the changed sequence number and a selected user key for the new Coupon.
In a first, separate aspect of the present invention, at least two different handling options are established between a money source and the user. Once a plurality of payment card transactions are completed between the user and a second entity within a given time period, the user is billed for the plurality of payment card transactions. The money source uses a first handling option for any of the plurality of payment card transactions in which the selected user key is the first user key and a second handling option for any of the plurality of payment card transactions in which the selected user key is the second user key.
In another, separate aspect of the present invention, the first and the second handling options are mechanisms to bill two separate accounts. The user can be sent a single bill for charges to the two separate accounts, even if the accounts are established with different entities, such as different credit card companies or banks, or the user can be sent a first bill for the first account and a separate bill for a second account. One of the accounts can be a credit account and another account can be a debit account. Alternatively, the first and the second handling options can provide a mechanism for classifying the nature of the payment card transactions, such as using the first handling option for business transactions and the second handling option for personal transactions.
In still another, separate aspect of the present invention, the first and second handling options are different mechanisms for controlling access to information concerning payment card transactions. One mechanism can be used to implement restrictions on distribution of information relating to payment card transactions or restrictions on distribution of personal information of the user to third entities. The user can be charged consideration for use of this mechanism. Another mechanism can be used to permit distribution of information relating to payment card transactions to third parties or permit distribution of personal information of the user to second entities. The user can be given consideration to use this mechanism.
In yet another, separate aspect of the present invention, a card number generator is used to generate a payment card number. The card number generator can be included within an electronic payment card, and that card can be capable of storing data so that a standard magnetic stripe reader can read it. The electronic card can be used in an anonymous face-to-face payment card transaction, or it can be used to implement an anonymous Mail Order Telephone Order (xe2x80x9cMOTOxe2x80x9d) credit card transaction between the user and a merchant.
Accordingly, it is a primary object of the present invention to provide a method for generating customer one-time unique purchase order numbers that can be customized by a user.
This and further objects and advantages will be apparent to those skilled in the art in connection with the detailed description of the preferred embodiments set forth below.